A blog maintained by the team working to hold
oil giant Chevron accountable for its human rights
and environmental abuses in Ecuador

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Tuesday, July 12, 2016

Ted Boutrous embarrassed himself in Huffington Post this week in an apparent attempt to "up the crazy" as the trial to seize Chevron's assets in Canada looms. It appears the "Big Lie" sickness of Donald Trump-ism continues to grow in America. The lawyer for Gibson Dunn, a firm known for its corporate attack dog efforts, has taken lying and slander to a new level. To Boutrous, giant fossil fuel corporations are the victims of legal attacks by environmental and human rights groups and the actual human rights violations or environmental destruction is either insignificant, or nonexistent in Ted's view. To top it off, Boutrous – defender of Chevron – worst global polluter ever – is lecturing that "the ends don't justify the means." It's not a coincidence that Chevron will find itself in court once again in a matter of weeks trying to justify the unjustifiable.

Boutrous has now tagged himself as the kind of lawyer who blames the rape victim for dressing the "wrong way". Or the kind of lawyer who blames the black man shot by police for being where he shouldn't have been and "looking like a threat." He has the audacity to blame the people Chevron deliberately poisoned by intentionally dumping billions of gallons of toxic waste in the Ecuadorian Amazon. Despite the fact that it is the largest oil-related disaster in history, which remains yet today in the form of almost 1,000 toxic waste pits, Boutrous claims there's "a lack of evidence."

To the families of the over 1,400 people who have already died of cancer in the Amazon – Boutrous denies your suffering. To the indigenous communities wiped out by Chevron's operations (and Texaco) over decades, Boutrous never believed in you in the first place. To any environmental or human rights advocates who denounced the environmental "crime of the century" Boutrous says you are criminals.

For the record, here are but a few of the incontrovertible facts to which Texaco has already confessed and to which any non-corrupted lawyer would concede:

Texaco never apologized to a single person from the affected communities for its deliberate acts of pollution.

Texaco left in 1992 and signed a $40 million deal with the government of Ecuador to "clean up" a small portion of the pits (that agreement specified that it did not protect Texaco from any civil action).

Texaco argued for a decade in US Federal Court in New York that Ecuador was the proper venue for the case and agreed that it would honor the decisions of the Ecuadorian court system. However, on the first day of the new trial in Ecuador, Texaco insisted that the case should not be heard in Ecuador either.

Chevron's RICO trial specifically excluded any evidence of the contamination in Ecuador and in no way exonerated nor even suggested that Chevron/Texaco was not responsible for the contamination in Ecuador.

Chevron's key witness in its RICO case, disgraced ex-judge Alberto Guerra, received over $2 million from Chevron for his testimony, admitted to lying about alleged bribes from lawyers for the Ecuadorians, and admitted that he embellished his story to get Chevron to pay him more.

In 2013, a US District Court found that Chevron had not shown that Amazon Watch had done anything wrong in relation to the Chevron litigation or that Amazon Watch had engaged in fraudulent conduct or furthered a conspiracy against Chevron. In an 11-page order, Judge Cousins quashed Chevron's attempts to open up Amazon Watch's files, and threatened sanctions against Gibson Dunn and Chevron if they reissued subpoenas unless they were "significantly narrower in scope to seek only highly relevant information and more carefully tailored to avoid infringing upon the organization's First Amendment rights."

None of this can be contested by Boutrous, no matter how much he may wish he could. And every single one of these facts are ones Chevron and Gibson Dunn hopes desperately that the public (and justices in Canada) will ignore or forget. Yet despite knowing them, and all those ethical guidelines Ted theoretically understands, he is willing to write that there's a "lack of evidence" against his client Chevron and the environmental NGOs asserting otherwise are criminals for doing so.

It's unclear which is a greater danger to our society, the ability for oil companies to intentionally and catastrophically pollute, or the willingness of large law firms like Gibson Dunn to cheat, lie and generally abuse the legal system in order to deny the existence of the continuing suffering of tens of thousands of people. Add to that the vilification and intimidation of anyone who dares to speak against them. Sounds like Donald Trump's ideal America to me.

Ted Boutrous is not an idiot, but he has demonstrated absolutely no moral compass whatsoever. In the fever to defend his client – a company that admitted to the deliberate pollution in the first place – he has gone completely off the deep end. And he has embarrassed himself in the process. That's probably why he (or his staff) have obsessively deleted every comment to his post on Huffington – a delicious irony from a "First Amendment lawyer."

The notion that anyone would accept his premise when Chevron has lost every legal contest apart from Kaplan's (which is still under appeal, and was just handed another major blow by a recent SCOTUS decision about the use of RICO in such circumstances) is frankly preposterous.

No, we can't afford to sue Ted and Gibson Dunn for their acts of libel and intimidation, and they know it. The system of justice here completely favors the Chevrons of our society. That's why they are infuriated that the people of Ecuador actually persevered. Despite all Chevron and Gibson Dunn did to prevent it, they couldn't stop the $9.5 billion judgement against them. They won't be able to stop the action to enforce that verdict in Canada to seize Chevron's assets there, but Ted Boutrous and his buddies intend to get much richer trying.

Ted's post is a sign that the Chevron attack dogs are foaming at the mouth the closer we get to a trial in Canada (it begins in September). Last year, when the Supreme Court of Canada sided unanimously with the Ecuadorians to allow them to sue to enforce their verdict, it sent shock waves through Chevron's board room. The phone calls to Gibson Dunn have probably been non-stop ever since.

Ted Boutrous is using Huffington Post to spread more lies that Chevron hopes will sow more doubt about this case. "Perhaps there is no evidence in Ecuador after all." That's what they hope journalists or justices in Canada will think. Perhaps global warming is a hoax, too. "I read on the internet," says Donald Trump. That is the era we live in.

Anyone can appreciate the irony when Ted Boutrous calls Trump out for his racist comments about a judge while he dismisses Ecuador's entire judicial system, local communities and indigenous peoples as either too corrupt or too "unsophisticated" to make a just ruling based on the overwhelming evidence in the Amazon. Trump doesn't appear embarrassed, but Ted certainly has been.

Wednesday, July 6, 2016

What does superstar quarterback Tom Brady and a group of Ecuadorian indigenous tribes suing Chevron for massive oil contamination have in common?

They both had lawsuits heard in U.S. federal trial court and appealed to the Second Circuit Court of Appeals in Manhattan. That, however, is where any similarity ends.

Brady – who only wants to play football – got his decision from the appellate court only 4 weeks after oral argument.

The Ecuadorians, who only want to survive on their ancestral lands without being poisoned by oil waste?

They are still waiting, 64 weeks after their oral argument.

A ruling on whether a superstar football player, married to a superstar model, gets to play football appears to be more important than cleaning up toxic waste in the Ecuador rainforest.

The Ecuadorians' quest for justice began over 23 years ago when they sued Chevron for intentionally contaminating the Amazon rainforest where they literally live off the land.

Chevron and its legions of law firms have done everything in their power to smother the lawsuit in legal delays to block a $9.5 billion Ecuador judgment against the oil giant. The country's highest court upheld the judgment in a unanimous decision, in the forum where Chevron insisted the trial be held – in Ecuador. In all, 18 consecutive appellate judges in Ecuador and Canada have ruled in favor of the villagers and against Chevron.

With the writing on the wall, Chevron still refuses to pay the judgment, which serves to further delay the case and force the Ecuadorians to try to seize the company's assets in other countries.

Justice delayed is justice denied but, hey, football season is about to begin.

I'm not so presumptuous to think this blog will have any impact on the timing of the 2nd Circuit ruling in the Ecuadorians' case. I also recognize legal arguments vary in complexity, but it's important for environmental advocates to take note of the difference in treatment. A valid argument can be made that a U.S. courtroom is the last place to look for justice when trying to hold a U.S. corporation accountable for environmental misdeeds in other countries.

For example, the Southern District Court of New York (the federal trial court in Manhattan) is largely responsible for making a legal mess of the original lawsuit against Chevron filed before U.S. Judge Jed Rakoff in 1993. In 2001, he ordered the case returned to Ecuador, over the objections of the indigenous groups. (Yes, it took eight years just to dismiss and move it to Ecuador.) The Ecuadorians argued their country's courtroom could not handle a mass tort case this complicated.

Since then six top-shelf corporate law firms, at the direction of Chevron, have used every legal trick in the book to slow down the case in Ecuador and grind it into quicksand.

This includes drowning the country's under-funded court system with motions, some of which were duplicates of earlier motions already ruled on, and bankrupting the Ecuadorians by filing related lawsuits against them in over two dozen jurisdictions across the U.S. See here and here. Finally in 2011 – eight years later – an Ecuador court ruled against Chevron.

Enter Gibson Dunn's Randy Mastro.

Leading the legal hordes is Mastro, now infamous for having been paid $8 million of taxpayer money to do a bogus "study" supposedly "exonerating" Governor Chris Christie in the Bridgegate scandal. Mastro and his team destroyed notes from his own investigation that produced no negative findings against Christie. Watchdog groups and some New Jersey electeds have questioned whether the cover-up of Bridgegate should be treated as a criminal conspiracy, involving the Governor, his staff, Gibson Dunn and specifically Mastro. (Gibson Dunn is earning quite a reputation; the High Court of England last year ruled the corporate law firm falsified evidence in another case.)

Mastro - who with great rhetorical flair accused poor Ecuadorian villagers and indigenous peoples living in the rainforest of a "criminal conspiracy" to shake down Chevron – also was the man responsible for prepping the main witness in the U.S. "fraud" lawsuit against the Ecuadorians and their attorneys.

That witness, Alberto Guerra, spent a whopping 53 days being coached by Mastro and Gibson Dunn lawyer Avi Weitzman to get his story straight in federal court.

We know this because Guerra recently admitted under oath in a separate but related case that he lied about major portions of his testimony during the lower court trial in the Southern District, heard by U.S. Judge Lewis Kaplan.

Story No. 1: Guerra alleged the Ecuadorians' attorneys "ghostwrote" the Ecuador judgment and hired Guerra to edit it, which he said he did on his home computer. But when Chevron couldn't find the judgment on his computer, Guerra recanted.

Story No. 2: Actually, Guerra said, the verdict was on a flash drive that the Ecuador judge hearing the case gave him at the Quito airport. But when Chevron couldn't find the judgment on any flash drives, Guerra changed his story yet again.

Story No. 3: Actually, Guerra said, he traveled to the jungle on a bus and edited the judgment there on a laptop owned by one of the Ecuadorian attorneys.

As each story unraveled and evolved, Chevron agreed to pay Guerra more money for testimony the company desperately needed to hold up its "fraud" allegations. To date, Chevron has paid him at least $2 million in cash and benefits and moved him and his family to the U.S., in exchange for his testimony. He also is an admitted criminal, testifying under oath to taking numerous bribes in other cases before he was removed from the bench. Read this Courthouse News article for more background.

Chevron shareholders remain wary of the risks from an $11 billion judgment against the company in Ecuador. They also continue to be critical of Chevron management's mishandling of the case.

At Chevron's annual shareholder meeting in May, a significant number of Chevron shareholders expressed criticism of management. Shareholders voted 378,540,311 shares in support of a resolution that cited management's mishandling of the case in Ecuador and called for tighter shareholder oversight.

Put simply, Chevron management lost the confidence of shareholders holding nearly one third of shares and valued at almost $38 billion.

Proponents believe that Chevron’s management has materially mishandled legal matters brought against the company by communities in Ecuador – in ways that increased liabilities for the matter, currently amounting to $9.5 billion. Moreover, proponents are concerned about the adequacy of the company’s disclosure of those risks to shareholders. Finally, proponents are deeply troubled that the company has harassed longstanding shareholders who questioned the company’s approach to these issues….

…It is our belief that instead of negotiating an expedient, fair, and comprehensive settlement with the affected communities in Ecuador, Chevron management pursued a costly, risky, and ultimately unsuccessful legal strategy that involved material missteps. Although the Company has engaged in various legal efforts to try to negate the Ecuador judgment, the proliferation of circumstances and locations where the Ecuador judgment may be enforced increases the likelihood of a large eventual loss as a result of the case.

In the past year, Chevron's management has suffered additional court setbacks and made strategic blunders in the case that heighten the risks to shareholders.

Chevron continues to lose legal ground to the Ecuadoran villagers as they seek to collect on their $11 judgement against the company. To collect the $11 billion judgment, the Ecuadorian villagers have filed judgment enforcement actions targeting Chevron assets in Canada, Brazil, and Argentina. In September 2015, the Supreme Court of Canada unanimously ruled that the Ecuadorian plaintiffs may proceed to enforce the $11 billion judgment against Chevron’s Canadian assets. This figure represents more than 73% of the value of Chevron’s total assets in Canada. In addition, time is not on Chevron's side. Interest on the underlying judgment is increasing Chevron’s liability by an estimated $275 million per year.

Meanwhile Chevron's efforts to put pressure on the Ecuadoran government may spectacularly backfire. Chevron has been awarded $96 million plus compound interest by the Permanent Court of Arbitration in the Hague due to Ecuador’s breach of its contractual obligations to Texaco. On June 6, 2016, the United States Supreme Court refused to hear Ecuador’s appeal of that ruling. What turns this good news into bad for the company is that the $96 million judgment against Ecuador is now an asset of Chevron's in Ecuador.

The Ecuadoran courts have already awarded what remained of Chevron's assets in the country to the plaintiffs as part of their collection on their $11 billion judgment. If the plaintiffs were to collect even a few million dollars of the $96 million judgment, they would have the money necessary to launch further collections against Chevron's assets around the world. As Marco Simons, Legal Director of EarthRights International, noted in a prescient blog five years ago:

[T]he plaintiffs only need to win once or a few times, while Chevron needs to win everywhere. Even if Chevron wins twenty cases, just one loss could cost the company hundreds of millions or billions of dollars.

Chevron also faces a possible overturning or rollback of its judgment against the plaintiffs and their lawyers in its RICO suit. A recent U.S. Supreme Court decision sharply curtailed the use of the RICO statute in a case against RJR Nabisco over cigarette smuggling in Europe, according to a new legal filing by Gupta/Wessler.

Deepak Gupta, who represents U.S. attorney Steven Donziger, made the submission to the United States Court of Appeals for the Second Circuit asserting that the RJR decision “further limits private RICO actions by requiring proof of a quantifiable, redressable and domestic injury – something Chevron has steadfastly refused to identify," Gupta said. The RJR decision also made clear that the RICO statute could not be used to attack a final judgment from a foreign court, as Chevron has tried to do in the Ecuador case, Gupta added in the letter.

Companies are no longer satisfied with evading their liability for human and environmental harms. Of course, they continue their tried and true tactics of denial, cover ups and fraud, but with the additional goal of silencing their critics, they are counter-attacking, mounting a sophisticated and well-funded campaign to target, sue, surveil, and harass the activists, lawyers, and NGOs that expose their harms. They have powerful allies in Congress and in the media that aid them in their efforts to intimidate, distract and sap the resources of organizations that are already out-resourced in what can only be described as David and Goliath struggles.

However, shareholders have continued to voice their concerns over Chevron management's mishandling of the Ecuador case. The continued high vote for resolutions critical of management demonstrate that a large number of Chevron's own shareholders lack confidence in the company's ability to withstand the fall-out from losing the Ecuador lawsuit without significant damage to shareholder value.